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around here there are tons of places hiring.....lots of jobs if you want to work...
How do you feel about debt?
- Thread starter Nick1994
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The Establishment Survey was down but the Household Survey was very much up.
That is bad....again living above there means and having to have the latest everything...There is data for that.
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Credit Card Debt Rising Again Amid the Pandemic
New survey shows Americans are running their balances up again, and total credit card debt in the U.S. is creeping back toward the $1 trillion mark.www.investopedia.com
Key Points:
- 55% of Americans carry a balance month to month
- Nearly 1 in 5 Americans have over $20,000 in credit card debt.
And this is just consumer revolving debt (credit cards). Then add the installment loans (mortgage, auto, etc), personal loans and its clear to see that most Americans are drowning in debt.
Sometimes what one can acquire with a loan when they can not afford to pay cash is worth the extra burden of having to pay the interest along with the initial loan in the future. One thing I stress to beginer drivers is the importance of having tires that are good enough for proper traction in the winter before winter arives. That is someting that even someone who is barly getting buy should be very willing to go into dept for.
There is an old question that I asked my niece when she was driving a vehicle with worn out tires in the fall: "Ok, here is a situation for you, the prom is coming up, and you need a new dress, and your car has tires that are not good enough to drive on in the snow, and winter is ariving soon. And you only have enough money to buy either the prom dress or tires good enough for winter. Which one do you buy." And she said "The prom dress of course." And I said "Congratulation, you just made the wrong choice. Here is what can happen, you slide on slippery roads and have a big accident because your tires were too worn out for driving on snow or ice, and you and your daughter get killed." Then I showed her what the proper tread depth for winter tires looks like by showin her good tires, and what her tires looked like. Shortly after that she went out and bought 4 new winter tires.
There is an old question that I asked my niece when she was driving a vehicle with worn out tires in the fall: "Ok, here is a situation for you, the prom is coming up, and you need a new dress, and your car has tires that are not good enough to drive on in the snow, and winter is ariving soon. And you only have enough money to buy either the prom dress or tires good enough for winter. Which one do you buy." And she said "The prom dress of course." And I said "Congratulation, you just made the wrong choice. Here is what can happen, you slide on slippery roads and have a big accident because your tires were too worn out for driving on snow or ice, and you and your daughter get killed." Then I showed her what the proper tread depth for winter tires looks like by showin her good tires, and what her tires looked like. Shortly after that she went out and bought 4 new winter tires.
I was just going mention Affirm. It’s interesting to note that Affirm and other buy now pay later companies are expecting record growth the same time traditional credit cards are approaching record debt levels.
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For me, personally........... I started off 2022 a payment ahead on a Self credit-building CD for $1500 which will yield me a credit card. Losing my two cards in 2020 lit a fire under me that you can't even understand.
I also paid off one outstanding, defaulted debt I had, and I only have one left.. which I will pay off SOON, I will say "in March" due to the way this year started off for me.
After that, I will likely be debt free.
New year, new start.
I also paid off one outstanding, defaulted debt I had, and I only have one left.. which I will pay off SOON, I will say "in March" due to the way this year started off for me.
After that, I will likely be debt free.
New year, new start.
That’s a plus. I’ve been lucky to always be able to pay my bills when I get them and save. Now, I’m with mom and stepdads financial planner/advisor. Plus I usually (read: always) have cash on me.
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I've had the same cash in my pocket for over two weeks. It will be used next week when I have a car to move. (Two people in one car, then two people, each driving one car.) But yes, this year is starting off well.
I like to get all the craziness out of the way the first 10 or so days of the New Year since something crazy always seems to happen New Years week.
There is also an entire website dedicated to credit, much like this one, if you are accepted and have a fair degree of wit.......
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My only remaining debt is with Portfolio Recovery and if they make me an offer to settle it, I will accept.
Usually, they contact you when they want it.. (Debt collector.)
Usually, they contact you when they want it.. (Debt collector.)
IMO, this is an oversimplification. You are not accounting for equity; it is not a wash as compared to someone who was paying rent. I agree with your premise of minimizing interest expense, but you have to have a payment you can live with. A 30 year loan can act close to a 15 year loan if one pays extra each month. It is risk aversion. Credit is a tool; just like any other tool used properly you drive the nail. Used improperly and you bang your thumb. Ouch!
You know what I did? I got sick and tired of my fixed mortgage. I traded it in for many 3 and 5 year variables with teaser rates. I then made the same payment as my 30 year fixed. This is in accord with your point of minimizing interest expense.
I also put every bonus, tax return, etc into the loan balance. I drove used strippie Toyota pickups while the parking lot was full of drop dead gorgeous Beemers. That's how I paid off my home.
Not to derail an excellent thread, but as someone who has spent three decades in law enforcement and investigated thousands of accidents, she could also be charged with negligence and/or reckless operation (depending on the jurisdiction) for not having adequate tires. Not to mention in some states the ability for an officer to revoke registration roadside due to the car not being able to pass inspection, and the subsequent insurance problems once the insurance carrier learns that the vehicle owner caused a crash due to poor tires.
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Did not know this. I learn something new every day!
What an excellent wealth of information.
You NEVER have a home "free and clear". NEVER. Not ever. It does not happen.
you are in a minority....but I do the same..
Your location matters. Some area has a lot of land, and cheap construction cost (near border so lots of migrant construction workers, legal or not), with lax building code so the homes are likely build for 30 years of lifespan before needing major improvement but much cheaper. Then there're places where the home cost is high because the area is transforming from low income jobs to high income, lots of people moving in but not many ways to build, etc. So you can try all you want to save up to 20% and a 15 year fix before you decide to buy a home, and either rent before you get there or you can decide not to take a job and move a family before that.
So the equation becomes:
1) low cost low income area: it's your choice, your home likely won't appreciate much as it age, there'll be lots of land to build new community on and you can sell your home when it is used up to recoup the cost, likely break even with some appreciation.
2) med cost med income area: same as above, you may want to retire in it because the area is nice but you will wait for some time before you can buy a place you live in, you are placing bets on whether your savings will catch up faster than your desired homes' appreciation. Are you feeling lucky locking in a higher mortgage cost (borrow more) or locking in an earlier price? Are you feeling lucky?
3) high cost high income area: well you sort of are paid high income so you can live there. You are betting between say, in my area, a $8k a month rent for a home in a good school (because you likely value education if you are paid that much due to your education), or you are paying maybe $3k a month for private school, or you are paying $15k a month on opportunity cost to mortgage interest / prop tax / insurance / opportunity cost. It really has no way around it when all your company's competitors are paying their employees with stock money that land some lucky fellows (not all, but enough to drive up the one who want to buy a home) $600k a year per couple in the last several years (no guarantee for the next several years of course) to drive up the local home prices.
4) Move somewhere to make 30% less and get massive home price discount. We are seeing that in this pandemic like crazy. IMO this will balance out the equation in a bigger area (averaging Austin with Bay Area and Seattle, averaging out Texas with Utah and Montana, for example).
So, depends on your income level and local market, 20% down and 30 years fix can be the right choice. Remember interest rate don't stay the same so your 15 years fix at 6% can be less affordable than 30 years fix at 3%. Do you want to wait till you save up enough to buy with 15 year fix but the interest rate rise to 6%? or do you think 30 years fix now at 3% is worth locking into?
We are on the same page, in fact your words are better. "minimizing interest expense"...my long rants about debt is always about interest. The general public really does not understand the implications, hell, its why the banking industry is so flush with cash and why the massive advertising.
You may be interested to know I have had two mortgages in my life when it came to my primary residences. I always paid the slightly higher rate and took out a 30 year mortgage.
I didnt go into this because my posts are long enough and think you can agree most of the general public does not have the discipline to pay off a mortgage 15 years early or even 10 years early.
Much of my (almost all) adult working career I was self employed. I always paid the 30 year mortgage like a 15 year and but took out 30 year mortgages as a safety net should business/businesses experience a downturn I could fall back on the 30 year lower payment. This was actually advice by my accounting firm when I was young and in business for the first time. It made a lot of sense and did this through my adult life.
(When first starting out, I also had private business loan and a private loan on a commercial building, all paid off ahead of time)
Young people I cant fault, they need to be taught this stuff in High School. It drives me nuts because I "feel" for people who get wrapped up in a mess because of borrowing money. They cant see the big picture, what interest really does to the cost of a loan, even a college loan.
I have taught my kids and seem really receptive, one of them really practices what I taught them and very proud, the other very aware.
Any significant loan in their lives I printed out amortization schedules for them, so they could see first hand the true cost of the money they borrow and how by every principle payment on the next line they were shortening the loan term by one month at the end.
My daughter REALLY took this to the next level with her student loans, paid them off in just short of 5 years, put all she had into getting it paid off.
Anyway, the banking cartel and bank lobby would never allow Washington to require the proper education, lets say, replace the last two years of gym class with actual knowledge of finance. Financial independence would crush banking profits. (and yeah, right now I am doing quite well with WFC, as Americans we borrow and spend like its our last day on the earth and like no other nation on earth, banks will jump right into bed with you to lend you money.
SO ends todays rant *LOL* I really am not some horrible person my posts may sound like, I just care about people and boy, corporations have got the human brain figured out for maximum profit.
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Another thing: is renting a prom dress at 60% of the price of new a good deal or buying it at 100% of the price a good deal? Can you sell your used prom dress?
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